Post-disaster contracting rush leads to confusion

By Kimberly Palmer

September 6, 2005

As federal, state and local agencies deal with the aftermath of Hurricane Katrina, contractors are navigating emergency procurement rules that go into effect when the normal, paperwork-heavy process would cause unacceptable delays.

The government increasingly relies on contractors to run day-to-day operations. Vendors become even more important when disasters such as Katrina strain the government's resources. In the past, such as during the reconstruction of Iraq, this haste has led to contract mismanagement and a disregard for procurement law.

Emergency situations can make a complicated procurement process even more confusing. The Federal Acquisition Regulation, the guiding document for federal purchases, disperses its rules on emergency procurement throughout the verbose document, making it difficult for officials and contractors unfamiliar with emergency procurement law to figure out exactly what they can and cannot do.

The centralized Web site for posting and learning of procurements, FedBizOpps.gov, also is of little use. As of Tuesday morning, more than a week after the hurricane blew through the Gulf Coast, the site contained only one request related to Katrina: The Homeland Security Department issued a call for delivery of diesel-powered forklifts by Friday to Gulfport, Miss.

The vast majority of emergency contracts are being awarded outside of the centralized posting system that is normally required. Indeed, on its home page, FedBizOpps states, "Due to the immediacy of emergency opportunities, it is unlikely that opportunities dealing with the hurricanes will be advertised through the FedBizOpps system."

The site directs potential contractors to the Web sites for the Federal Emergency Management Agency, Homeland Security and local Army Corps of Engineer units, which do not provide much further information. The FEMA Web site directs contractors to FedBizOpps for information and contains no further details on contracting for Katrina. The other links require visitors to be pre-registered.

Acquisition Solutions, an Oakton, Va.-based government contractor and consultancy that advises agencies on procurement, recently updated information to help agencies and contractors understand procurement rules during emergencies. The guide points to relevant parts of the FAR, including rules that allow agency heads to increase procurement limits, rely on oral requests for proposals instead of written ones, and bypass the normal competition process.

In some situations, agencies are allowed to issue "letter contracts," which are not formal contracts but contain basic information. A formal contract is issued later. The Federal Acquisition Regulation also requires agencies to make an effort to award contracts to local firms and businesses during emergencies.

Existing contracts, such as those managed by the General Services Administration, also can help agencies place orders quickly. The agency responded within 48 hours during last year's hurricanes to establish a call center for victims.

In one of its reports on emergency contracting, Acquisition Solutions wrote: "Keep the objective in mind, make good business judgments, use these flexibilities and the FAR Guiding Principles, provide for competition where you can, and take care of documentation, if need be, later."